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Skype to Expand VOIP Service

Skype will release the official version of its VOIP application this summer, along with a new paid service for making calls to traditional phones.

LONDON—Skype Technologies SA, makers of the free peer-to-peer VOIP application, plans to offer a paid service by the end of the year that will allow users to make calls to conventional telephones in addition to other computers, and will eventually offer a plan that will allow traditional phones to call Skype users, according to the companys co-founder.

Speaking at the VON Europe conference here, Skype CEO Niklas Zennström said that the first full version of the service, currently in beta, would be released in the summer. In addition to the basic free service, the company will offer a service called SkypeOut that will allow users to prepay to connect to PSTN (Public Switched Telephone Network) phones. Although Zennström didnt disclose the price of the service, he said it would be at "a very competitive rate."

The company also plans to develop another paid service, called SkypeIn, which would allow people to reach Skype users from a regular phone. Subscribers would be issued a Skype phone number, allowing others to call them directly from a PSTN phone. According to Zennström, the logistics of making SkypeIn work are more complex than for SkypeOut, and depend on the volume of VOIP users growing significantly.

Skype-to-Skype calls will continue to be free. "Free is good, and we dont need to make money from every user—just from some of them," added Zennström.

Skype has proved to be one of the most popular VOIP applications since its launch in August 2003, with 3.5 million registered users. In March, the company raised an additional $18.8 million in funding from venture capitalists and individual investors.